So, you have decided it is the right time to sell. But is your business ready to sell and what can you do to maximise its value?
Getting your business ready for sale isn’t something to be rushed. It takes some careful preparation to make sure you get the best value and the smoothest transaction possible.
Here are some ways to go about it:
Get Your Financials in Order
First things first, make sure your accounts are up-to-date and crystal clear. This might mean getting your chartered accountant to give them a thorough review. A potential buyer will want to scrutinise your financial statements and having them in good shape can speed up the sale process.
Improve Profitability
It’s a no-brainer that a profitable business is more attractive to buyers. Look for ways to cut unnecessary costs and perhaps even delay large expenditures that won’t immediately add value to the business. Also, emphasise the revenue streams that are most stable and profitable.
Organise Business Operations
Ensure all your operations are streamlined. Document your processes, supplier agreements, customer contracts, employee roles, and so forth. The easier it is for a new owner to step in and understand the business, the better.
Evaluate Assets
Take stock of all your assets, whether it’s property, equipment, or intellectual property like trademarks or patents. Make sure all assets are in good condition and make necessary repairs or updates, if possible.
Assess Your Team
A strong, competent team can be a significant selling point. If possible, aim to resolve any ongoing HR issues and establish a stable and effective management structure.
Deal with Outstanding Issues
Sort out any legal or compliance issues that could be potential roadblocks. This might mean settling disputes, securing necessary licenses, or making sure you’re up to code on regulations relevant to your industry.
Develop a Sales Memorandum
This is a document outlining key information about the business, intended for prospective buyers. It generally includes details like the asking price, an overview of the business, and a summary of financials.
Set the Right Price
Valuating your business is a delicate art. It’s often beneficial to consult professionals to get an accurate and fair valuation. Setting the price too high may scare off potential buyers, while setting it too low will mean you’re not getting the value you deserve.
Choose the Right Time and Method
Timing can be everything. Pay attention to market trends in your industry and consider how seasonality might affect the sale. You’ll also need to decide whether to sell the business yourself or hire a broker.
Be Prepared for Due Diligence
Once you have a potential buyer, they’ll want to do their homework, which is what’s known as ‘due diligence’. Be prepared for them to dig deep into every aspect of your business. Having all your documentation in order can make this process less stressful.
How We can Help
Accsys Accountants can help in several ways but mainly by making sure that that business is organisationally and financially ready to sell. We can also help prepare documentation in advance to make sure that you are ready for any due diligence and information requested that will come your way.
